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Canada’s Corporate Ethics Watchdog Investigates Nike and Dynasty Gold Over Alleged Use of Forced Labor in China

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On July 11, 2023, Canada’s corporate ethics watchdog, the Canadian Ombudsperson for Responsible Enterprise (CORE), announced separate investigations into Nike Canada Corp. and Dynasty Gold Corp. The probe is centered on allegations that these companies have benefited from the use of forced Uyghur labor in their supply chains and operations in China.

Nike’s Journey to China

Nike, a global sportswear giant, began its journey in China during the 1970s. The company was attracted by the low wages and talented manpower available in the country. Philip Knight, one of the founders of Nike, saw China as a massive market for the brand. Nike’s consumer presence in China started in 1981, and instead of directly importing its products, the company chose to sponsor Chinese sporting clubs and athletic events.

Allegations Against Nike and Dynasty Gold

The allegations against Nike and Dynasty Gold were filed on June 21, 2022, by a coalition of 28 civil society organizations. The criticism versus Nike contends that the company has not taken tangible steps to precaution its supply chain doesn’t be contingent upon enforced labour. The complaint further alleges that Nike has links with several Chinese companies identified by the Australian Strategic Policy Institute (ASPI) as using or benefiting from Uyghur forced labor.

In response to these allegations, Nike has maintained that audits and investigations at each of the factories found no links to forced labor. However, CORE has decided to proceed with an investigation through independent fact-finding on the Nike assertions, citing a need for enhanced human rights due diligence to identify, prevent, and mitigate the human rights-related risks of Nike’s operations.

Dynasty Gold, a junior gold miner, is also under scrutiny. The complaint against Dynasty alleges its mining operations in northwest Xinjiang use Uyghur forced labor. In reaction, Dynasty affirmed it doesn’t consume any functioning regulator of the mine, a prerogative that CORE said would prerequisite to be measured.

Canada’s Response to Allegations

Sherri Meyerhoffer, the ombudsperson, stated that neither company provided a satisfactory response to the allegations of forced labor made against them. Meyerhoffer said in a news release, “I have absolute to launch analyses into these objections in order to acquire the facts and endorse the appropriate actions,” 

The CORE does not have the authority to summon witnesses or take legal action against the companies. However, if a company does not engage with it, CORE can recommend the minister of international development to withdraw existing trade services or deny future trade services and funding.

The Future of the Investigation

As the investigation unfolds, the CORE will await the results and then provide recommendations, if required. The ombudsperson stressed that her office’s task is to resolve human rights criticisms in a fair and impartial manner to help those stuck and strengthen the responsible business performance of the corporations involved.

This examination marks a noteworthy step in Canada’s efforts to guarantee that Canadian companies are not complicit in human rights exploitations abroad. It underscores the position of corporate accountability and the need for corporations to conduct thorough due assiduousness to ensure their operations do not invade human rights. As the world watches, the results of these investigations could have far-reaching insinuations for multinational companies operating in regions with testified human rights exploitations.

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